Thursday, September 22, 2011

Regarding The Tyco Split

In Tuesday's post concerning Netflix and its apparent preparation for a split into two companies, I neglected to mention the companion disintegration story of the day: Tyco.

Long associated with the excesses of its senior management and CEO, Dennis Koslowski, Tyco was restructured in the wake of his departure. Now, the remaining businesses under the Tyco umbrella are splitting yet again.

It strikes me as odd that the general sentiment greeting Tyco's announcement was positive, calling some pundits to compare it to Irene Rosenfeld's dismantling of the Kraft conglomerate she just mashed together only a few years ago.

Why is it that those two are good de-conglomerations, but Netflix's more clear-cut separation of businesses isn't?

Furthermore, not to miss an opportunity to drive this point home yet again, how can investors embrace such unbundling of needless conglomeration, yet fail to push GE's CEO Jeff Immelt to finally split that firm into its natural, individual constituent parts? And save investors the pricey headquarters functions which include Immelt's own lavish compensation package?

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